People look for a leader who is inspiring to follow (Kouzes and Posner 1992). Ethical leadership is about questioning what is right or wrong and establishing an example on rightful or wrongful decision (Guy 1990 cited in Kouzes and Posner 1992). Rubin et al. (2010) believes that leaders are an essential element of change in an organisation. There are many arguments on ethical leaderships in organisations today, so what does being ethical means?

Teleology and Deontology makes up the two main principles of ethics. The word teleological is derived from the Greek word ‘telos’ which means purpose. Teleological or consequentialism is results-oriented and focuses on the purpose of each action and whether there is an intention or meaning for the action (Alder 1998). The term deontological is derived from the Greek word “deon” which means duty. Deontological perspectives are concerned with the process that leads to results and see the duty to act in a particular way (Alder 1998). Deontological does not justify the adherence to the theory while teleological always justifies the adherence to the theory. Deontological guides us to be fair and unselfish while teleological suggests that as long as you achieve the intended result, whatever you did to a person is acceptable (Emelda 2011).

Ford Motor Company is one out of 3 automotive companies which made the rankings of the Ethisphere 100 most ethical companies in 2014 (Ethisphere 2014). Ford implements a strong culture of compliance and ethics within the organisation (Ford 2014). According to Alex Brigham, the executive director of the Ethisphere Institute, Ford has promoted ethical practices to the environment and displays a clear view of how the company operates under the highest standards which lead to excellent performance and profits (PR Newswire 2015). Ford has a compliance program with ethical practices that defines the organisation operation guidelines. They include:-

Figure 2 Ford Ethical Compliance Practices (2014)

In response to the global warming situation, Ford has cooperate with industry partners and energy companies to reduce greenhouse gas emissions and energy use in their operations (Ford 2014). On a social perspective, Ford maintains that communication with employees and business partners improves their work efficiency and quality to further innovate (Ford 2014).

Image Source: NLPC 2014

It took a lawsuit over a death of a woman for General Motors (GM) to recall 2.59 million cars with faulty ignition switches (Fisk 2015). The New York Times reported that GM engineers found the problem with the ignition switches in 2009 but it was not till 2014 that it was let known to the world (Norris 2014). The faulty ignition key would accidentally move from the run position resulting the engine and certain electrical components including the airbags to be turned off (Bennett and Spector 2013). GM is handling this crisis with their utmost caution, but are the leaders to be blamed? It was reported that the senior management was well aware of the issue but chose to ignore it because of the profits the company was making. Business psychologists use this case as an example of how managers can turn a blind eye to morality for profit purposes (Rupp 2014). Many of the business scandals including the Enron collapse has a similar pattern: ‘The ethical behaviour of those involved eroded over time’ (Gino, Ordonez and Welsh 2014). As Bernie Madoff said, once you get comfortable with something, before you realise it has snowballed into something huge (Gino, Ordonez and Welsh 2014).

Ethics still maintains as an arguable territory, while many authors described ethics in negative terms, the focus on ethics is on how we judge what is ethically right (Cranston, Ehrich and Kimber 2005). We all try to be ethical in our workplace, we would want to handle situations ethically. What comes around is, if the manager supports your ethical decision or would they want a workaround which was more profitable or looks better to the team. It is not always easy to confront your manager or go one level up to report an unethical act as your manager may be protected by the senior management and it all comes back to you being a nasty tell-tale. I strongly believe that in order to be an ethical organisation, you need to start with ethical decisions from the top.

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5 thoughts on “Theme 4 – Ethical Leadership”

Hi Chin Yee. Let’s say if a senior manager of the company was performing financial fraud in the company in order to gain money to cure his mother who needs urgent medical funds to sustain her life. Which view of ethic you will choose, in between deontological or teleological view of ethics, in judging him for this case in business?

As much as i have compassion to a son’s act to save his mother. Unfortunately, in today’s society i would need to choose a deontological principle and he still has to face the consequences of committing fraud. The senior manager could have voiced out and i am sure an ethical organisation would have assist him in collecting funds to aid his ailing mother as a lot of societal companies have raised charity to fund employees families in medical emergency.

Hi Chin Yee. I agree with your introduction saying that leaders are essential elements of change in an organisation. Ford Motor Company is a good example to show ethical organisation. Ford has been putting an effort to conserve the environment by reducing greenhouse gases. An interesting and inspiring article. Well Done!!